European Trade Commissioner Cecilia Malmström welcomed the WTO Appellate Body's report on Thursday 28 March on US compliance with aid to the aircraft manufacturer Boeing (case DS 353 - see EUROPE 11805/10).
"The Appellate Body has now settled this case definitely, confirming our view that the US has continued to subsidise Boeing despite WTO rulings to the contrary", Malmström said in a statement.
In 2012, the WTO concluded that the United States had massively subsidised the national aircraft manufacturer by $10 billion since 1989 (see EUROPE 10572/25). Airbus, Boeing's European competitor, now estimates these federal, local or NASA subsidies of at least $15 billion.
On Thursday, the WTO Appellate Body sided with the Europeans in considering that the United States had not put an end to state aid considered illegal. In particular, it considered that Washington had not withdrawn its FSC/ETI tax exemptions from Boeing. However, these exemptions have been reclassified as prohibited subsidies, the category of subsidies considered to be the most damaging to trade.
Within Airbus, it is now estimated that the European dispute against Boeing is now much more extensive than the American dispute against the European aircraft manufacturer (DS 316), especially since the announcement of the cessation of production of the A380. In May 2018, the WTO Appellate Body rejected many US claims in the Airbus aid dispute (see EUROPE 12020/7).
Remaining ready to fight it by calling for trade sanctions, if necessary, the European manufacturer hopes that this appeal verdict will encourage the United States and Boeing to act constructively to create a level playing field that will refer to the future in the global aviation sector, at a time when Chinese competition is becoming more and more intense.
On the other side of the Atlantic, the US High Representative for Trade, Robert Lighthizer, welcomed a major victory for his country, convinced that the WTO considered that “the United States does not provide Boeing with support that would be even remotely comparable to the exceptionally large and harmful EU subsidies to Airbus”.
This verdict by the WTO Appellate Body comes in the same week as China announced a record 300 Airbus aircraft order.
See the report of the WTO Appellate Body: http://bit.ly/2JLkw7D. (Original version in French by Mathieu Bion)